In some shape or form, many companies have experienced the struggles of needing more infrastructure and resources for their supply chain. Over the course of the last 5 years, the number of ecommerce companies outsourcing their logistics needs has consistently increased. Some studies report a 5.3% percent growth each year during this time. As a result, the third-party logistics industry, also known as 3PL, surpassed $1 trillion in revenue in the U.S. in 2019 and is expected to exceed $2 trillion by the year 2028. Of course, there’s a reason why businesses are turning to 3PL providers. Outsourcing various logistics services saves time and money while boosting customer experiences. By using companies like Fratogo that are focused on quality and the latest technology, even greater benefits can be realized.
What Are 3PL Services?
As mentioned, 3PL stands for third-party logistics. In essence, this refers to companies outsourcing their logistics needs to a separate entity. But the extent to which various third parties manage logistics can vary. They can also differ in quality, capacity, and level of technological integrations. Therefore, it’s important to know what your options are when looking for a 3PL service provider. At Fratogo, our 3PL services are comprehensive, providing logistics solutions from one end to the other. And we pride ourselves on having the latest and most up-to-date information technologies to streamline these processes.
At a basic level, core 3PL services involve 4 main activities. These include receiving inventory, warehousing and storing inventory, picking and packing order fulfillment, and shipping orders to consumers. In order for 3PL providers to manage ecommerce customer orders, they must naturally receive products at their sites. These products must then be warehoused in storage, where the inventory is kept until a consumer order is placed. Once placed, items are selectively picked and packed with a focus on proper packing materials and dimensional weights. Finally, shipping labels are printed along with tracking information before being shipped for delivery. In total, these are the main activities involved in 3PL services.
Not All 3PL Providers Are the Same
On the surface, 3PL services look pretty straightforward. But, as with most things, the money is in the details. For example, a logistics company may state they have the ability to receive and store your products. But do they have a large enough capacity to accommodate your company’s growth in the future? Some companies like Fratogo can also help reduce freight transportation costs by arranging FTL or LTL services. Likewise, some 3PL companies charge extra for various packing materials beyond their basic contractual fees. And, unlike Fratogo, many logistics providers may not manage reverse processing (customer returns) and instead put that back on your company. These are all important areas to explore when choosing a 3PL services provider.
One of the most notable areas where 3PL providers may vary is the level of software integrations they offer. In some instances, a logistics company may require customer orders to be manually placed into their system. This is naturally inefficient and prone to mistakes. Instead, higher-quality 3PL providers like Fratogo have fully integrated software systems. This means that orders, shipments, and inventories are all connected electronically and can be easily accessed by ecommerce businesses. Not only do these integrated systems enhance inventory management and all 3PL services, but they also improve customer communications, data analytics reporting, and various modes of product tracking. As you might imagine, this is important at every step of the logistics chain. Thus, it’s vital that the level of technology integration be well understood when outsourcing these tasks.
Fratogo’s 3PL Logistic Services
Given Fratogo’s reputation within the logistics sector, you’re probably not surprised that we’re well recognized as an exceptional 3PL provider. We provide end-to-end logistics services and do so with quality, efficiency, and cost containment in mind. This is evident in our partners who facilitate receiving your inventory to our warehouses. Likewise, we have ample capacity for storage to accommodate the future needs of your business. Plus, when it comes to fulfillment, order processing, and shipping, our integrated software places us head and shoulders above our competition. That’s why our client-retention rate is among the industry’s best.
With Fratogo as your 3PL partner, your company will realize many benefits along the way. Based on surveys, over 78% of shippers using 3PL services state their costs have been reduced. Over 86% also describe significant improvements in their customer relations and communications. And 91% report positive relationships with their 3PL providers. Given these statistics and the growth of 3PL services, it’s certainly worth considering logistics outsourcing. And, at Fratogo, we believe we’ll not only meet your logistics needs—we’ll likely exceed your expectations as well.
Comments